Investing is one of those rare games where cheating isn't against the rules. Well, not all cheating. Insider trading is still a crime.
But by 'cheating', here I mean looking over other investors' shoulders and seeing what they're buying. Of course, not all investors are worth a look. You never want to copy the test of the worst student in the class.
But the fund managers at Bennelong Australian Equity Partners are amongst those investors that are well worth a peek, in my view. Bennelong's managed funds are often at the top of the pile in terms of performance history. The Bennelong Emerging Companies Fund, for example, has managed a return of 22.47% per annum since its inception in 2017.
And it's this fund we're going to have a peek at today.
Bennelong has just released its monthly update for May, and it merits some interesting reading if you're looking for some small-cap ASX shares to buy.
Bennelong's top ASX share picks
In its letter to investors, Bennelong remained coy about its exact portfolio holdings (and fair enough). But it did give us some tidbits.
The fund manager named Viva Leisure Ltd (ASX: VVA), Mader Group Ltd (ASX: MAD) and BWX Ltd (ASX: BWX) as amongst its top holdings for the month.
Viva Leisure owns a chain of gyms, including Club Lime and HIIT Republic. Here, Bennelong obviously bet on the lifting of coronavirus restrictions surrounding gyms benefitting this company going forward. Fair enough too – this stock is already up more than 260% from the lows we saw in March.
Mader (which has an enviable ticker symbol, I must say) services mining equipment and machinery, diagnosing and fixing issues including machine breakdowns, critical repairs, and preventative maintenance. According to the company it works with 'all the major names in Australian and international mining', which presumably includes BHP Group Ltd (ASX: BHP) and Fortescue Metals Group Limited (ASX: FMG). Again, Mader has done well in recent months, up more than 30% from the March lows. Even so, this company remains significantly underwater from its highs in February, and so might still offer some growth opportunities.
BWX is a boutique beauty products manufacturer which includes brands such as Sukin, Andalau, USPA and Nourished Life. Its shares have also been doing well lately, up more than 36% from its March lows. Like Mader though, BWX is still underwater in 2020 so far, and so perhaps Bennelong is playing a long game with this one.
Foolish takeaway
Just because one ASX investor is buying a share doesn't mean we should all rush out and blindly copy their moves without doing our own research first. But we can still 'cheat' by getting some of our next ideas to research from well-performing fund managers. So take these shares with a grain of salt, but take note nonetheless!
